<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) - April 19, 1994
MELLON BANK CORPORATION
(Exact name of registrant as specified in charter)
Pennsylvania 1-7410 25-1233834
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
One Mellon Bank Center
500 Grant Street
Pittsburgh, Pennsylvania 15258
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code - (412) 234-5000
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibit
Number Description
99.1 Mellon Bank Corporation's Press Release, dated
April 19, 1994, regarding first quarter results of
operations.
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
MELLON BANK CORPORATION
Date: April 19, 1994 By: /s/ Steven G. Elliott
---------------------
Steven G. Elliott
Vice Chairman, Chief
Financial Officer and
Treasurer
<PAGE>
EXHIBIT INDEX
Number Description Method of Filing
99.1 Press Release dated Filed herewith
April 19, 1994
<PAGE>
Mellon News Release
EX-99.1
[Logo ANALYSTS:
of Mellon Bank] Charles M. Johnston John W. Calnan
412-234-5601 412-234-4633
Contact: MEDIA:
Thomas W. Butch Tilda H. Walsh Corporate Affairs Group
412-234-6436 412-234-5873 One Mellon Bank Center
Pittsburgh, PA 15258-0001
FOR IMMEDIATE RELEASE
MELLON REPORTS RECORD QUARTERLY NET INCOME IN FIRST QUARTER 1994
o Net Income Increases 41 Percent and Earnings Per Share Increases
39 Percent, Excluding a Restructuring Charge and Securities
Gains in Prior-Year Quarter
o Return on Equity Reaches 17.25 Percent for Quarter; Return on Assets
Reaches 1.43 Percent
o Fee Revenue Increases 48 Percent, Comprises Nearly 50 Percent
of Total Revenue for Quarter
PITTSBURGH, April 19, 1994 -- Mellon Bank Corporation today reported
first quarter 1994 net income of $131 million, or $1.77 per common
share, compared with net income of $34 million, or $.31 per common
share, in the first quarter of 1993. Net income was at the highest
quarterly level in the Corporation's history, excluding those quarters
affected by certain nonrecurring gains. Annualized return on common
shareholders' equity and return on assets were 17.25 percent and 1.43
percent, respectively, in the first quarter of 1994.
Results for the first quarter of 1993 included an after-tax
restructuring charge of $112 million taken in connection with the
acquisition of The Boston Company, as well as $53 million in after-tax
gains on the sale of securities. Excluding these items, the
Corporation's pro forma net income would have been $93 million, or
$1.27 per common share, in the first quarter of 1993; and pro forma
annualized return on common shareholders' equity and return on assets
would have been 13.86 percent and 1.17 percent, respectively.
-more-
<PAGE>
Mellon Reports Earnings
April 19, 1994
Page 2
"Our first quarter results affirm, again, Mellon's earnings strength
and momentum," said Frank V. Cahouet, chairman, president and chief
executive officer. "The same trends that have driven earnings growth
over the past several quarters--strong revenue growth propelled by our
recent acquisitions, and reduced credit quality expense--sustained very
good results."
Net interest revenue for the quarter was $362 million, up 14 percent
from $317 million in the prior-year period. Fee revenue was $343
million, up 48 percent from $232 million in the first quarter of 1993.
The increase in net interest revenue was attributable primarily to the
Corporation's 1993 acquisitions of The Boston Company and AFCO Credit
Corporation; the increase in fee revenue was attributable principally
to The Boston Company acquisition.
Operating expense for the first quarter of 1994 was $471 million,
compared with $533 million in the first quarter of 1993. The year-ago
quarter included a $175 million pretax restructuring charge related to
The Boston Company acquisition. Excluding this item, operating expense
for the first quarter of 1993 would have been $358 million.
The provision for credit losses was $20 million in the first quarter of
1994, compared with $35 million in the prior-year period. Net credit
losses were $17 million, down significantly from $49 million in the
first quarter of 1993.
-more-
<PAGE>
Mellon Reports Earnings
April 19, 1994
Page 3
Nonperforming assets totaled $314 million at March 31, 1994, down
$27 million, or 8 percent, from $341 million at Dec. 31, 1993.
Nonperforming assets decreased by $218 million, or 41 percent, compared
with March 31, 1993.
With assets of approximately $37 billion, Mellon Bank Corporation is a
major financial services company headquartered in Pittsburgh, providing
commercial banking, retail financial services and numerous fee-based
service products, including trust and investment, cash management and
mortgage banking.
##
NOTE: Detailed supplemental information follows.
<PAGE>
Mellon Reports Earnings
April 19, 1994
Page 4
SUPPLEMENTAL INFORMATION
________________________
Pending Dreyfus Corporation Merger
__________________________________
In December 1993, the Corporation entered into a definitive
agreement to merge with The Dreyfus Corporation (Dreyfus).
Dreyfus is the nation's sixth-largest mutual fund company, with
approximately $74 billion of assets under management and
administration. The merger of the Corporation and Dreyfus will
create a diversified financial services organization with annual
revenues of more than $3 billion, including fee revenue of about
$1.6 billion.
Dreyfus shareholders will receive .88017 shares of the
Corporation's common stock for each share of Dreyfus common stock
outstanding. Dreyfus has approximately 37 million shares
outstanding. The transaction will be accounted for under the
pooling-of-interests method, with prior period financial results
restated to reflect the merger. The Corporation's capital ratios
following the merger will be substantially higher than the March
31, 1994 ratios. However, as a result of the approximately 32
million additional shares of the Corporation's common stock to be
issued to the Dreyfus shareholders, the Corporation's restated
earnings per share and book value per share will be approximately
15% lower than previously reported amounts.
In connection with the transaction, the Corporation expects to
record one-time after-tax merger expenses and restructuring
charges of approximately $73 million at closing, which is
anticipated in the third quarter of 1994.
<PAGE>
Mellon Reports Earnings
April 19, 1994
Page 5
Completion of the merger is contingent upon the approval of the
shareholders of the Corporation and Dreyfus, various regulatory
approvals and certain approvals by the boards of directors and
shareholders of the mutual funds advised by Dreyfus.
Net Interest Revenue
- --------------------
<TABLE>
<CAPTION>
(taxable equivalent basis) Quarter ended
March 31,
(dollar amounts in millions) 1994 1993 Inc/(Dec)
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Net interest revenue $365 $319 $ 46
- -------------------------------------------------------------------------------
Average interest-earning assets $31,432 $27,844 $3,588
- -------------------------------------------------------------------------------
Net interest margin 4.70% 4.65% 5 bp
- -------------------------------------------------------------------------------
</TABLE>
The 14% improvement in net interest revenue in the first
quarter of 1994, compared with the first quarter of 1993,
primarily reflected a higher level of interest-earning assets
resulting from the second quarter 1993 acquisition of The Boston
Company and the December 1993 acquisition of AFCO Credit
Corporation (AFCO). AFCO contributed approximately $16 million
to net interest revenue in the first quarter of 1994. A
reduction in nonperforming assets also contributed to the
improved net interest revenue and net interest margin compared
with the prior-year period. Net interest revenue in the first
quarter of 1994 included revenue from the Corporation's seasonal
tax refund anticipation loan program, which contributed 11 basis
points to the net interest margin compared with 13 basis points
in the prior-year period.
<PAGE>
Mellon Reports Earnings
April 19, 1994
Page 6
Credit Quality Expense and Net Credit Losses
- --------------------------------------------
<TABLE>
<CAPTION>
Quarter ended
March 31,
(dollar amounts in millions) 1994 1993 Inc/(Dec)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Provision for credit losses $20 $35 $(15)
Net expense (revenue) of acquired property (8) 25 (33)
- --------------------------------------------------------------------------------
Credit quality expense $12 $60 $(48)
- --------------------------------------------------------------------------------
Net credit losses (recoveries)(a):
Domestic:
Consumer credit $14 $15 $ (1)
Commercial real estate (3) 29 (32)
Commercial and financial 3 6 (3)
- --------------------------------------------------------------------------------
Total domestic 14 50 (36)
- --------------------------------------------------------------------------------
International 3 (1) 4
- --------------------------------------------------------------------------------
Total net credit losses $17 $49 $(32)
- --------------------------------------------------------------------------------
Annualized net credit losses to average loans .27% 1.00% (73)bp
- --------------------------------------------------------------------------------
</TABLE>
(a) Excludes net credit losses on segregated assets.
Credit quality expense, defined as the provision for credit
losses plus the net expense of acquired property, was $48 million
lower in the first quarter of 1994, compared with the prior-year
period, reflecting continuing improvement in the credit quality
of the loan portfolio and the lower level of real estate acquired
(OREO). The $8 million in net revenue from acquired property in
the first quarter of 1994 primarily resulted from $9 million in
net gains on the sale of acquired property. Net expense of
acquired property of $25 million in the first quarter of 1993
included $21 million of provision to the reserve for OREO. No
provision to the reserve for OREO was recorded in the first
quarter of 1994. Net credit losses decreased $32 million
compared with the first quarter of 1993 primarily resulting from
lower commercial real estate net credit losses. The Corporation
expects continued moderation in the level of credit losses for
the remainder of 1994, compared with the prior year, particularly
in the level of commercial real estate credit losses.
<PAGE>
Mellon Reports Earnings
April 19, 1994
Page 7
Noninterest Revenue
- -------------------
<TABLE>
<CAPTION>
Quarter ended
March 31,
(in millions) 1994 1993 Inc/(Dec)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Fee revenue:
Trust and investment management $175 $ 73 $102
Cash management and deposit transaction charges 51 48 3
Information services 20 36 (16)
Mortgage servicing 16 17 (1)
Credit card 14 13 1
Foreign currency and securities trading 22 4 18
Other 45 41 4
- --------------------------------------------------------------------------------
Total fee revenue 343 232 111
Gains on sale of securities - 87 (87)
- --------------------------------------------------------------------------------
Total noninterest revenue $343 $319 $ 24
- --------------------------------------------------------------------------------
</TABLE>
Fee revenue increased by $111 million, or 48%, in the first
quarter of 1994, compared with the first quarter of 1993,
primarily reflecting $112 million of fee revenue attributable to
The Boston Company, partially offset by the approximately $21
million reduction in fee revenue resulting from the fourth
quarter 1993 sale of two information services businesses.
The $102 million improvement in trust and investment management
fees in the first quarter of 1994 resulted principally from $95
million of these fees earned at The Boston Company. The $3
million increase in cash management and deposit transaction
charges, compared with the first quarter of 1993, was the result
of increased volume.
Information services fees decreased $16 million compared with the prior-
year period, primarily as a result of the Corporation's December 1993 sale
of two information services businesses. The two businesses sold generated
<PAGE>
Mellon Reports Earnings
April 19, 1994
Page 8
quarterly revenues of approximately $21 million. Partially offsetting the
decrease in information services fees was revenue generated by a Canadian stock
transfer company in which the Corporation increased its ownership from 10% to
80% during the second quarter of 1993.
The increase in foreign currency and securities trading fee
revenue in the first quarter of 1994 was attributable to foreign
exchange fees earned, primarily from global custody customers, at
The Boston Company. Other fee revenue included $11 million from
the Corporation's tax refund anticipation loan program, which
will be lower in the second half of 1994. Fee revenue generated
by this seasonal product decreased $7 million compared with the
prior year period, due primarily to a change in the operating
agreements with tax preparation firms with whom the Corporation
does business. Increases in several other fee revenue categories
offset the decreased revenue from the tax refund anticipation
loan program.
The Corporation recorded $87 million in gains on the sale of
securities during the first quarter of 1993, resulting from the
sale of securities in the available for sale portfolio. These
sales were undertaken as part of the financing plan and balance
sheet restructuring related to the acquisition of The Boston
Company.
<PAGE>
Mellon Reports Earnings
April 19, 1994
Page 9
Operating Expense
- -----------------
<TABLE>
<CAPTION>
Quarter ended
March 31,
(dollar amounts in millions) 1994 1993 Inc/(Dec)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Staff expense $215 $155 $ 60
Net occupancy expense 45 37 8
Professional, legal and other purchased services 43 31 12
Amortization of goodwill and other intangibles 38 24 14
Equipment expense 33 26 7
FDIC assessment and regulatory examination fees 16 14 2
Other expense 89 46 43
- --------------------------------------------------------------------------------
Operating expense before the net expense of
acquired property and restructuring expense 479 333 146
- --------------------------------------------------------------------------------
Net expense (revenue) of acquired property (8) 25 (33)
- --------------------------------------------------------------------------------
Restructuring expense - 175 (175)
- --------------------------------------------------------------------------------
Total operating expense $471 $533 $ (62)
- --------------------------------------------------------------------------------
Average full-time equivalent staff 21,800 18,100 3,700
- --------------------------------------------------------------------------------
Efficiency ratio*:
Including amortization of intangibles 68% 60% 8 bp
Excluding amortization of intangibles 62 56 6
- --------------------------------------------------------------------------------
</TABLE>
* Operating expense before the net expense (revenue) of acquired
property and restructuring expense as a percentage of net
interest revenue (computed on a fully taxable equivalent basis)
and noninterest revenue, excluding securities gains.
Operating expense before the net expense of acquired property and
restructuring expense increased by $146 million, or 44%, in
the first quarter of 1994, compared with the first quarter of
1993. The increase was primarily the result of $98 million of
expenses attributable to The Boston Company and an increase in
marketing expense of $20 million, primarily related to the
introduction of the Corporation's CornerStone credit card
product. The impact of expenses attributable to AFCO were offset
by the decrease in expenses related to the information services
businesses sold in December 1993. Also impacting first quarter
1994 operating expense were increases in various categories in
support of revenue growth.
Operating expense before the net expense of acquired property and
restructuring expense increased $15 million in the first quarter of 1994
from $464 million in the fourth quarter of 1993. This increase resulted
from a $20 million increase in marketing expense primarily related to the
CornerStone credit card product as well as increased expense in support of
<PAGE>
Mellon Reports Earnings
April 19, 1994
Page 10
revenue growth. The fourth quarter of 1993 included $13 million of
nonrecurring expenses related to winding down certain data processing
operations.
The increase in average full-time equivalent staff level,
compared with the prior-year quarter, primarily reflected the
addition of the employees of The Boston Company. The acquisition
of The Boston Company contributed approximately 3,200 to the
average full-time equivalent staff in the first quarter of 1994.
The Corporation adopted FAS No. 112 "Employers' Accounting for
Postemployment Benefits", on a prospective basis in the first
quarter of 1994. Adoption of the standard did not materially
affect the Corporation's first quarter 1994 financial position or
results of operations.
A restructuring charge of $175 million pretax, or $112 million
after-tax, was recorded in the first quarter of 1993 to reflect
management's estimate of restructuring costs associated with the
integration of The Boston Company.
Income Taxes
- ------------
The provision for income taxes totaled $83 million in the first quarter of
1994, for an effective tax rate of approximately 38.5%, compared with $34
million in the first quarter of 1993. Excluding the impact of the
restructuring charge and securities gains, the Corporation's effective tax
rate for the first quarter of 1993 was 40%. The decrease in the effective
rate between quarters is primarily the result of tax legislation, enacted
<PAGE>
Mellon Reports Earnings
April 19, 1994
Page 11
in August 1993, which permitted the deductibility of
certain intangible amortization expense. The Corporation
currently estimates that the ongoing effective tax rate will be
38.5% until the completion of the merger with The Dreyfus
Corporation, after which it is currently anticipated that the
effective tax rate will increase to approximately 39%.
CREDIT QUALITY
- --------------
Nonperforming Assets(a)
- --------------------
<TABLE>
<CAPTION>
March 31, Dec. 31, March 31,
(dollar amounts in millions) 1994 1993 1993
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Domestic nonperforming loans:
Consumer mortgage $ 67 $ 61 $ 30
Commercial real estate 57 89 165
Other domestic 56 45 101
International nonperforming loans 16 7 8
- --------------------------------------------------------------------------------
Total nonperforming loans 196 202 304
- --------------------------------------------------------------------------------
Acquired property:
Real estate acquired
through foreclosures 109 100 99
In-substance real estate foreclosures 43 75 136
Reserve for real estate acquired (35) (37) (19)
- --------------------------------------------------------------------------------
Real estate acquired, net of reserves 117 138 216
Other assets acquired 1 1 12
- --------------------------------------------------------------------------------
Total acquired property 118 139 228
- --------------------------------------------------------------------------------
Total nonperforming assets $314 $341 $532
- --------------------------------------------------------------------------------
Nonperforming loans as a percentage of
total loans .80% .83% 1.56%
Total nonperforming assets as a
percentage of total loans and net
acquired property 1.27% 1.39% 2.70%
- --------------------------------------------------------------------------------
</TABLE>
(a) Excludes segregated assets.
Nonperforming assets totaled $314 million at March 31, 1994, a decrease of
$27 million, or 8%, compared with December 31, 1993. Domestic
nonperforming real estate assets, which include nonperforming commercial
and consumer real estate loans and OREO net of the reserve, decreased by
$47 million during the quarter primarily as a result of returns to accrual
status, asset sales and repayments. The increase in other domestic
nonperforming loans primarily resulted from the addition of a commercial
<PAGE>
Mellon Reports Earnings
April 19, 1994
Page 12
and industrial borrower while the increase in international nonperforming
loans resulted from the addition of loans to a real estate developer.
Nonperforming assets decreased by $218 million, or 41%,
compared with March 31, 1993, primarily due to the $170 million
reduction in domestic nonperforming real estate assets. The
reduction resulted primarily from returns to accrual status,
asset sales and credit losses, offset in part by an increase in
nonperforming consumer mortgages, primarily from The Boston
Company. Other domestic nonperforming loans decreased by $45
million primarily due to repayments and credit losses. The $11
million decrease in other assets acquired resulted from asset
sales and write-downs.
Reserve for Credit Losses
- -------------------------
<TABLE>
<CAPTION>
March 31, Dec. 31, March 31,
(dollar amounts in millions) 1994 1993 1993
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Reserve for credit losses (a) $603 $600 $492
Reserve as a percentage of
total loans 2.46% 2.45% 2.53%
Reserve as a percentage
of nonperforming loans 308% 297% 162%
- --------------------------------------------------------------------------------
</TABLE>
(a) Excludes reserve for segregated assets.
The ratio of reserve as a percentage of nonperforming loans
continues to indicate strong reserve coverage, increasing to
308% at March 31, 1994 from 297% at December 31, 1993,
and 162% at March 31, 1993.
<PAGE>
Mellon Reports Earnings
April 19, 1994
Page 13
Selected Capital Data
- ---------------------
<TABLE>
<CAPTION>
March 31, Dec. 31, March 31,
(dollar amounts in millions) 1994 1993 1993
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Common shareholders' equity $2,793 $2,721 $2,363
Common shareholders' equity
to assets ratio 7.63% 7.53% 7.65%
Tangible common shareholders'
equity to assets ratio (a) 5.54% 5.37% 6.53%
Total shareholders' equity $3,385 $3,313 $3,024
Total shareholders' equity
to assets ratio 9.25% 9.17% 9.79%
Tier I capital ratio 7.6%(b) 7.39% 9.49%
Total (Tier I and Tier II)
capital ratio 11.1%(b) 10.97% 13.18%
Leverage capital ratio 6.9%(b) 6.88% 8.13%
Book value per common share (c) $42.76 $41.75 $38.03
Closing common stock price $56.125 $53.00 $60.75
- --------------------------------------------------------------------------------
</TABLE>
(a) Common shareholders' equity less goodwill divided by total assets
less goodwill.
(b) Estimated.
(c) The book value per common share assumes full conversion of
the Series D preferred stock to common stock. Accordingly,
this includes the additional paid-in capital on the Series D
preferred stock because this paid-in capital has no
liquidation preference over the common stock.
The increase in the Corporation's common and total shareholders'
equity in the first quarter of 1994, compared with December 31,
1993, was primarily the result of earnings retention. In the
first quarter of 1994, the Corporation increased its quarterly
common stock dividend by 47%, to $.56 per share, from $.38
per share.
FAS No. 115, "Accounting for Certain Investments in Debt and
Equity Securities", became effective on January 1, 1994.
Adoption of FAS No. 115 resulted in $15 million, net of tax, of
unrealized losses on assets classified as available for sale at
March 31, 1994 being recorded in retained earnings. Increased
volatility of shareholders' equity, certain capital ratios and
book value per common share could result in the future from
changes in unrealized gains and losses on assets classified as
available for sale.
<PAGE>
SUMMARY DATA
Mellon Bank Corporation (and its subsidiaries)
<TABLE>
<CAPTION>
Quarter ended
(dollar amounts in millions, ----------------------------------------------------
except per share amounts; March 31, Dec. 31, Sept. 30, June 30, March 31,
common shares in thousands) 1994 1993 1993 1993 1993
--------- -------- --------- -------- ---------
<S> <C> <C> <C> <C> <C>
Selected key data (a)
- ----------------------
Primary net income per common share $ 1.77 $ 1.50 $ 1.50 $ 1.32 $ .31
Return on assets 1.43% 1.26% 1.24% 1.16% .42%
Return on common shareholders' equity 17.25% 14.62% 14.95% 13.69% 3.39%
Yield on interest-earning assets,
on a taxable equivalent basis 6.70% 6.41% 6.41% 6.51% 7.03%
Cost of funds supporting interest-
earning assets 2.00% 2.02% 2.15% 2.21% 2.38%
Dividends per common share $ .56 $ .38 $ .38 $ .38 $ .38
- - - - - - - - - - - - - - - -
Pro forma (b)
- -------------
Primary net income per common share $ 1.77 $ 1.50 $ 1.50 $ 1.32 $ 1.27
Return on assets 1.43% 1.26% 1.24% 1.16% 1.17%
Return on common shareholders' equity 17.25% 14.62% 14.95% 13.69% 13.86%
- - - - - - - - - - - - - - - - -
Average balances for the period (c)
- -----------------------------------
Money market investments $ 1,884 $ 2,786 $ 3,822 $ 4,477 $ 2,997
Trading account securities 504 206 266 312 293
Securities 4,417 4,541 4,375 4,136 4,654
Loans 24,627 23,220 23,223 20,623 19,900
Total interest-earning assets 31,432 30,753 31,686 29,548 27,844
Total assets 37,186 35,769 36,562 34,421 32,133
Deposits 27,764 27,476 27,747 25,886 24,893
Total interest-bearing liabilities 24,819 24,211 25,185 23,647 22,215
Common shareholders' equity 2,760 2,692 2,625 2,464 2,336
Total shareholders' equity 3,352 3,329 3,285 3,124 2,945
</TABLE>
<TABLE>
<CAPTION>
Quarter ended
March 31,
----------------------
Computation of primary net income per common share 1994 1993
- -------------------------------------------------- ---- ----
<S> <C> <C>
Net income applicable to
common stock (d) $ 117 $ 19
======= =======
Average common shares outstanding 63,553 58,889
Average common shares issuable upon
conversion of Series D preferred stock 1,702 -
Other common stock equivalents, net of
shares assumed repurchased 1,032 1,738
------- -------
Total stock and stock equivalents 66,287 60,627
======= =======
Primary net income per common share (e) $ 1.77 $ .31
======= =======
</TABLE>
- ---------------
(a) Percentages are annualized where applicable. All amounts are
based on unrounded numbers.
(b) Pro forma results for the first quarter of 1993 exclude $112
million after-tax in restructuring expense and $53 million in
after-tax gains on the sale of securities.
(c) Computed on a daily average basis.
(d) After adding back Series D preferred stock dividends in the
first quarter of 1994.
(e) Based on unrounded numbers.
<PAGE>
CONDENSED CONSOLIDATED INCOME STATEMENT
Mellon Bank Corporation
<TABLE>
<CAPTION>
Quarter ended
March 31,
(in millions, except per share amounts) ----------------------
1994 1993
---- ----
<S> <C> <C>
Interest revenue
- ----------------
Loans and loan fees $436 $383
Money market investments 16 25
Trading account securities 7 4
Securities 58 68
---- ----
Total interest revenue 517 480
Interest expense
Deposits in domestic offices 92 108
Deposits in foreign offices 10 9
Short-term borrowings 25 16
Notes and debentures (with original maturities
over one year) 28 30
---- ----
Total interest expense 155 163
---- ----
Net interest revenue 362 317
Provision for credit losses 20 35
---- ----
Net interest revenue after provision
for credit losses 342 282
Noninterest revenue
- -------------------
Fee revenue 343 232
Gains on sale of securities - 87
---- ----
Total noninterest revenue 343 319
Operating expense
- -----------------
Staff expense 215 155
Net occupancy expense 45 37
Professional, legal and other purchased services 43 31
Amortization of goodwill and other intangibles 38 24
Equipment expense 33 26
FDIC assessment and regulatory examination fees 16 14
Other expense 89 46
Net expense of acquired property (8) 25
Restructuring expense - 175
---- ----
Total operating expense 471 533
---- ----
Income before income taxes 214 68
Provision for income taxes 83 34
---- ----
Net income 131 34
Dividends on preferred stock 15 15
---- ----
Net income applicable to common stock $116 $ 19
==== ====
Primary net income per common share $1.77 $ .31
===== =====
Fully diluted net income per common share $1.77 $ .31
===== =====
</TABLE>
<PAGE>
CONDENSED CONSOLIDATED BALANCE SHEET
Mellon Bank Corporation
<TABLE>
<CAPTION>
(dollar amounts in millions) March 31, Dec. 31, March 31,
1994 1993 1993
--------- -------- ---------
<S> <C> <C> <C>
Assets
- ------
Cash and due from banks $ 1,796 $ 2,169 $ 1,537
Money market investments 1,491 1,467 2,981
Trading account securities 268 116 215
Securities:
Available for sale (approximate fair value of
$2,920 and $2,273 at December 31, 1993 and
March 31, 1993, respectively) 2,589 2,916 2,257
Investment (approximate fair value
of $2,663, $2,139 and $2,115) 2,723 2,096 2,068
Loans, net of unearned discount of $71, $74
and $51 24,532 24,473 19,431
Reserve for credit losses (603) (600) (492)
------- ------- -------
Net loans 23,929 23,873 18,939
Premises and equipment 451 463 437
Acquired property, net of reserves of
$35, $37 and $19 118 139 228
Goodwill 810 825 369
Other intangibles 482 462 438
Segregated assets, net of reserves
of $4, $4 and $5 172 183 276
Other assets 1,787 1,430 1,154
------- ------- -------
Total assets $36,616 $36,139 $30,899
======= ======= =======
Liabilities
- -----------
Deposits in domestic offices $25,163 $26,355 $22,566
Deposits in foreign offices 1,598 1,183 431
Short-term borrowings 2,903 2,126 1,990
Other liabilities 1,643 1,172 966
Notes and debentures (with original
maturities over one year) 1,924 1,990 1,922
------- ------- -------
Total liabilities 33,231 32,826 27,875
Shareholders' equity
- --------------------
Preferred stock 592 592 661
Common stock - $.50 par value
Authorized - 200,000,000; 200,000,000
and 120,000,000 shares
Issued -63,920,279; 63,843,493
and 60,548,111 shares 32 32 30
Additional paid-in capital 1,779 1,774 1,627
Retained earnings 961 898 705
Warrants 37 37 1
Treasury stock - 294,567 and 365,700
shares at cost (16) (20) -
------- ------- -------
Total shareholders' equity 3,385 3,313 3,024
------- ------- -------
Total liabilities and shareholders'
equity $36,616 $36,139 $30,899
======= ======= =======
</TABLE>
- ---------------------
Note: In accordance with the adoption of FAS No. 115, certain
assets available for sale are reported at fair value at
March 31, 1994 with the unrealized loss of $15 million, net
of taxes, included in retained earnings. No
reclassifications of assets were made to adopt this new
accounting standard. The impact of recording the unrealized
loss resulted in a reduction of book value per common share
of $.22 cents.
